In Re Appointment of a Conservator for Burke Justice, Jr., Marguerite Justice, Successor Conservator of the Estate of Burke Justice, Jr., Adult Ward, First National Bank of Washington, Appellant, 418 F.2d 1162 (D.C. Cir. 1969)

Having paid the judgment against it and in favor of the conservator, the Bank demanded that the conservator pay the judgment in its favor and against Burke Justice, Jr. The conservator refused. The Bank thereupon filed its petition in the conservatorship proceeding in the District Court for an order directing the conservator to pay the judgment. The District Judge correctly noted that while the District Court had no authority to open or vacate a judgment of the Court of General Sessions, it had "authority of a plenary and continuing character over the conservatorship and the conservator." Pursuant to such authority the court denied the petition and this appeal followed.

The Bank's petition was addressed to the sound discretion of the District Court. See Price v. Williams, 129 U.S.App.D.C. 239, 393 F.2d 348 (1968); Mazza v. Pechacek, 98 U.S.App. D.C. 175, 233 F.2d 666 (1956); D.C. Code, 1967 ed. Secs. 21-1502(b), 21-1503. The Bank argues that there was an abuse of discretion by the District Judge since there were sufficient funds in the ward's estate to pay the judgment while, at the same time, maintaining the ward. The argument overlooks the purpose of the conservatorship statute which is to preserve the estates of persons who are unable to manage their own property. See Rossi v. Fletcher, 135 U.S.App.D.C. ___, 418 F.2d 1169, decided June 27, 1969. This protective purpose would be frustrated and the statute would be emasculated if a bank which wrongfully pays checks issued by a ward, and which is required to reimburse the ward's estate, were then permitted to call upon the estate for reimbursement in the same amount, thus accomplishing indirectly what the bank could not do directly. We conclude that the District Court wisely exercised its discretionary authority over conservatorship matters by effectuating the protective purpose of the statute.

We need not pass on appellant's contention that a contract is void under 21 D.C.Code, 1967 ed. Sec. 1507 only when a lis pendens has been filed, because appellant had actual notice from its own records of the existence of the conservatorship and the fact that the ward was not authorized to sign checks on the estate account. Since the purpose of filing a lis pendens is, at least in part, to give constructive notice of a pending suit or petition, Moses v. Boss, 63 App.D.C. 381, 382, 72 F.2d 1005 (1934); Allstate Finance Corp. v. Zimmerman, 272 F.2d 323, 325 (5th Cir. 1959); Dice v. Bender, 383 Pa. 94, 117 A.2d 725, 726-727 (1955), it is established that the filing of a lis pendens is not required as against one who has actual notice of the suit or petition. See, e. g., Stanton v. Stanton, 146 Neb. 71, 18 N.W.2d 654 (1945); Peck v. Trail, 251 Ky. 377, 65 S.W.2d 83 (1933). See generally 3 M. Merrill, Notice, Sec. 1190 (1952); cf. United States Trust Co. v. David, 36 App.D.C. 549, 557-558 (1911). In any event, whether the judgment against the ward was proper or not, it is plain that the Bank with its eyes open violated its duty to its depositor, the estate; and having done so it should not be allowed to charge the estate for its own error.

We conclude that there was no abuse of discretion by the District Court and accordingly we affirm the judgment.

Affirmed.

SPOTTSWOOD W. ROBINSON, III, Circuit Judge (concurring):

Despite some differences in the formulation of a decisional basis, I concur unreservedly in affirmance of the District Court's refusal to direct the conservator to pay the Bank's judgment against the ward. This I do without reaching any question as to the enforceability of the judgment in a context outside the ongoing conservatorship.¹  The issue, as I see it, is not the validity of the judgment, but whether the District Court erred in disallowing is satisfaction out of the assets in conservatorship. The circumstances portrayed by the record persuade me to the view that that question must be answered firmly in the negative.

The Bank contends primarily that the District Court had no discretion in regard to the petition for payment. Discharge of the judgment by resort to the ward's estate, so the argument runs, was a necessary incident of the outstanding judgment against the ward, and a result the court was unable to avoid. Alternatively, assuming a discretion, the Bank urges that the District Court abused it. The sole reason assigned in support of this position is that enough money would have remained after liquidation of the judgment to adequately maintain the ward and his family. I cannot accept either of the Bank's propositions.

It is clear to me that the District Court had broad discretion to determine whether the judgment would be acquitted from estate funds. It is elemental in American law that as to property in custodia legis — including that in conservatorship²  — a judgment does not possess its normal incidents. Moreover, our conservatorship statute³  confirms the District Court's power and duty to protect the estate in conservatorship. The conservator is invested with "control of the estate, real and personal, of the" ward,⁴  and that control is subjected to the District Court's supervision. The conservator can pay debts of the ward only "upon authority of the court;"⁵  even so vital a matter as the support and maintenance of the ward and his family is to be accommodated "as the court authorizes."⁶  I agree fully with the District Court that notwithstanding the judgment it had "authority of a plenary and continuing character over the conservatorship and the conservator." And I unhesitatingly join my colleagues in holding that payment of the Bank's judgment from the assets administered by the conservator could occur, if at all, only upon a sound exercise of the court's discretion to that end.

With that caliber of supervisory power residing in the District Court, I have no problem with the way the court exercised it. The Bank's factual premise — that satisfaction of the judgment would not jeopardize the future support of the ward and his family — is left dubious by record disclosures strongly suggesting that their support from the income of the conservatorship is already a marginal operation.⁷  And even if the Bank's premise were correct, neither the District Court nor we could ignore a legislative policy to protect the ward's estate from detrimental consequences of the ward's own improvident acts.⁸  Such a policy is evident, I think, from the congressional dictate that during the conservatorship the ward's property transfers and contracts not for necessaries are void.⁹  Only a doctrine foreign to our jurisprudence could foreclose the District Court from weighing that consideration as a factor bearing importantly on an exercise of discretion.¹⁰  And only a singular act of unwisdom could induce the court to shut its eyes to the role played by the Bank's own error and the procedural techniques it devised to circumvent it.